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Moving Expense Deduction

8/17/2015

 
If you move your home you may be able to deduct the cost of the move on your federal tax return next year.  This may apply if you move to start a new job or to work at the same job in a new location.  In order to deduct your moving expenses, your move must meet three requirements:

1.  Your move must closely relate to the start of work.  In most cases, you can consider moving expenses within one year of the date your start work at a new job location.  Additional rules apply to this requirement.

2.  Your move must meet the distance test.  Your new main job location must be at least 50 miles farther from your old home than your prior job location.  For example, let's say that your old job was three miles from your old home.  To meet this test, your new job must be at least 53 miles from your old home.

3.  You must meet the time test.  You must work full-time at your new job for at least 39 weeks the first year after the move.  If you're self-employed, you must also meet this test.  In addition you must work full-time for a total of at least 78 weeks during the first two years at the new job site.  If your tax return is due before you meet the time test, you can still claim the deduction if you expect to meet it.

See Publication 521, Moving Expenses, for more information about the rules.

If you qualify for this deduction, here are a few more tips from the IRS:

  • Travel.  You can deduct certain transportation and lodging expenses while moving.  This applies to costs for yourself and other household members while moving from your old home to your new home.  You may not deduct your travel meal costs.

  • Household goods and utilities.  You can deduct the cost of packing, crating and shipping your property.  This may include the cost to store or insure the items while in transit.  You can deduct the cost to disconnect or connect utilities at your and old and new homes.

  • Expenses you can't deduct.  You may not deduct:
  1. * Any part of the purchase price of your new home.
  2. * The cost of selling your home.
  3. * The cost of breaking or entering into a lease.

See Publication 521 for more examples.

  • Reimbursed expenses.  If your employer later pays you for the cost of a move that you deducted on your tax return, you may need to include the payment as income.  You must report any taxable amount on your tax return in the year you get the payment.

  • Address change.  When you move, make sure to update your address with the IRS and the U.S. Post Office.  To notify the IRS, file Form 8822, Change of Address.

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  • Home
  • About
    • Book An Appointment
  • Accounting
    • Dashboard
    • Xero+Accountency
    • Xero Intro
    • AutoMagical Accounting
    • QuickBooks >
      • QuickBooks Updates
    • Store
  • Payroll
  • Taxes
    • Dashboard
    • Individuals
    • Businesses
    • Tax Stuff >
      • Individuals >
        • Income >
          • Debt Forgiveness
          • Foreign Income
          • Gambling Income
          • Unemployment
          • Other Income
        • Deductions & Credits >
          • Adoption
          • Charitable Contributions
          • Earned Income Tax Credit
          • Educational Expenses
          • Energy Tax Credits
          • Employee Business Expenses
          • Other Deductions and Credits
        • Affordable Care Act - Individuals
        • Children and Dependents
        • Death
        • Disabled Taxpayers
        • Educators
        • Health Care
        • Identify Theft
        • Marriage and Divorce
        • Military
        • Real Estate
        • Retirement Savings
        • Seniors
        • State Taxes
        • Record Keeping
        • Who Must File
        • Other Topics
      • Businesses >
        • Affordable Care Act - Businesses
        • Year-end Reporting Obligations >
          • 1099's
          • Health Insurance Premiums
          • Depreciation
          • Reimbursed Employee Business Expenses
          • Company Automobiles
        • Employment Tax Credits
        • Independent Contractors
        • Tax Credits and Deductions for Businesses
        • Other Business Topics
        • Required Business Posters
      • Amended Returns
      • IRS Notices and Problems
      • Tax Plan >
        • All About the Earned Income Tax Credit
        • 5 IRS Audit Red Flags
        • Retirement Plans for Sole Proprietors
        • Are You Claiming All of Your Tax-Deductable Business Expenses for 2015?
        • All About Past Due Tax Returns
        • Do You Need to File Form 1099s?
        • How to File an Appeal with the IRS
        • Why You Might Get a Letter from the IRS, and What to Do
        • How to File an Amended Tax Return
        • Should You Claim the Home Office Deduction?
        • How to Avoid -- And Deal with -- Identify Theft
        • Q & A: IRS Audits
        • Are You Using the Right Business Structure?
        • Starting Planning for 2015 Income Taxes Now: 5 Tips
        • What You Need to Know About Estimated Taxes
        • Contractor or Employee? How the Income Tax Obligations Differ
        • The New Form 1095-A: Reporting Health Insurance Coverage
        • Are Your Social Security Payments Taxable?
        • Do You Qualify for the Earned Income Tax Credit?
        • Are You Eligible for Health Insurance Tax Credits
        • Employee Retirement Plans - Tax Advantages and Other Benefits
        • 5 Business Tax Credits You May Be Missing
        • New Business in 2012
        • Is it a Bad Debt or a Simple Revenue Loss? Telling the Difference
        • Business Taxes Add Complexity: How Will This Affect You?
      • Tax Scams